Bursa-listed CapitaLand Malaysia Trust has seen its net property income (NPI) drop by over 50% y-o-y for its 3QFY2021 ended Sep 30.
CLMT, which is owned by SGX-listed Capitaland Investment (CLI), reported an NPI of RM18.57 million ($5.99 million), 54.4% lower than the RM40.75 million figure in the same period last year.
CLMT said in a Oct 21 release that this was mainly attributed to a lower gross rental income and higher rental relief for eligible tenants, which resulted from more frequent and extended movement controls during the period compared to the previous year.
Distributable income for 3QFY2021 was sharply lower at RM3.19 million, compared to 3QFY2020’s RM23.22 million. As such, distribution per unit (DPU) for the period was 0.15 sen, an 86.7% y-o-y drop from 1.13 sen.
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Low Peck Chen, CEO of CLMT Management (CMRM), highlights that the operational challenges arising from the various safety measures imposed from June continue to affect CLMT’s financial performance and tenants’ business operations.
“We continued to extend targeted rental relief to support eligible tenants to help alleviate their cash flow and operating difficulties. Portfolio occupancy as at 30 September was 81.6%, while YTD 2021 shopper traffic was 29.5% lower y-o-y,” Low notes.
However, Low points out that under Malaysia’s National Recovery Plan 1, various economic sectors have reopened, including dining in and domestic tourism, which are vital for economic recovery.
As such, CLMT’s portfolio shopper traffic began to register improvements from September 2021, following the resumption of dine-in services. “We expect this trend to continue as domestic tourism activities and interstate travel pick up in the following quarter.”
She is aware that near-term challenges in Malaysia’s retail sector remain, and says the REIT will therefore continue to balance rental reversions and occupancy levels to ensure portfolio stability.
Lui Chong Chee, chairman of CMRM, notes Malaysia’s 90% vaccination rate, which is “ one of the prescribed targets for the country to return to normalcy.”
He adds that almost all retail trades for shopping malls have resumed operations and dine-in is allowed for fully vaccinated shoppers.
Furthermore, the resumption of interstate travel from 11 October 2021 is expected “to further benefit the CLMT malls that cater to domestic travellers,” Lui thinks.
Units of CLMT closed flat at 64 sen on Oct 21, while shares of CLI closed at $3.38, down four cents or 1.17 from its previous close.
